There's no bubble, you say

Ponneru It’s also worth remembering that higher inflation doesn’t always help stocks. David Glasner, an economist at the Federal Trade Commission, has shown that while stocks have moved in tandem with inflation expectations in recent years -- rising and falling together -- they didn’t do so before the crisis. One way of interpreting this finding is that during normal times, the stock market doesn’t root for the Fed to loosen its policy because that wouldn’t help the economy and thus increase expected corporate profits. In a depressed economy, though, the market starts rooting for looser money because it alleviates the depression. If that’s right, then the conflict between Wall Street and Main Street that the Fed’s critics posit doesn’t really exist: Looser money lifts real asset values -- including the real value of stocks -- when it increases expectations of future economic growth. It helps Wall Street, that is, by helping Main Street, but some of the effects show up in stocks first.

Well, says the author, stocks rise because the Fed has depressed short term rates and boosted the economy. Stock market is rational, no bubble.

 What is the natural short term rate? Anybody know?  How about that chart, it has one year, two year and five year. That chart tells me that we mostly will sit on our ass for another three years, because that chart should track real growth. We are fucked Mr. Ponneru.

The stock market does not obey earning per share rules, at the moment; but it sure obeys the rules of paper money.